Bengal coal cess may subsume to GST

Kolkata: It will be a bit of a mix bag in the coal front for Bengal. The state is likely to loose revenue as coal cess will be subsumed to goods and services tax (GST) but at the same time West Bengal Mineral Trading and Development Corporation, the nodal state body for mining is set to get Gourandih ABC coal block for supplying coal to MSME sector.

The chairman of Maharatna coal behemoth Coal India Ltd Sutirtha Bhattacharya said during the 42nd annual general meeting (AGM) that the coal price in Bengal would come down following roll out of GST. "As per as effect of GST is concern coal will be cheaper in Bengal as coal cess will be subsumed to GST," he said. It may be noted TOI had written in August that Bengal is set to lose Rs 1,200 crore after the country switches over to the GST (goods and services tax) regime. This includes coal cess and rural development and education cess.

The possible abolition of coal cess will cost the state exchequer no less than Rs 700 crore, something that the cash-strapped state can't afford without due compensation. Coal India officials estimate that a switch to royalties would result in a loss of 45% or more of the revenue generated from cess. As of now, the state has a combination of ad valorem cess of 25% on the value of coal production and a royalty of Rs 5.50-Rs 7 per tonne, depending on the coal grade.

Meanwhile, joint secretary of union coal ministry and director of Coal India, Vivek Bharadwaj told reporters here that the Centre has started allotting coal blocks to state run entities and WBMTDC too will get allotment soon. It may be noted that centre had earlier decided to allot coal blocks to states for using it in commercial purpose. According to Bharadwaj, 16 blocks have been earmarked for this out of which seven has already been allotted to states. "Bengal will get Gourandih ABC," he added. The Gourandih ABC has a reserve of 65 million tonne. It was once allotted to Sajjan Jindal Grpup and Himachal Emta combined but later was cancelled in 2012.

Bharadwaj added that the coal from this mine will be supplied to MSME sector.

“To save the environment and to fight climate change, my government has planned a major campaign. By 2022, we want to generate 175 GW of renewable energy. In the last three years, we have already achieved 60 GW or around one-third of this target,” he said.